Putin warns Armenia's EU bid could disrupt trade with Moscow

Russia President Vladimir Putin has warned Armenia’s Prime Minister Nikol Pashinyan that Yerevan’s bid to join the European Union could disrupt trade with Moscow.

Relations between the two countries have reached historic lows as Yerevan pivots towards the West, prompting sharp economic and political retaliation from Moscow.

In a tense meeting on the sidelines of the Shanghai Cooperation Organisation’s summit in Kyrgyzstan’s capital on Tuesday, Putin said that Moscow needs clarity on whether Yerevan wants to join the EU so it can decide on the future of bilateral trade with Armenia.

Putin also said that Armenia joining the EU would be tantamount to declaring a break from the Eurasian Economic Union (EEU) – a Russia-led grouping of several post-Soviet states.

Last April, Yerevan decided to adopt a law to launch the process of EU accession – a sticking point for Russia, which views its neighbouring post-Soviet countries as a vital security shield between its borders and the European Union.

In Bishkek, Armenia’s Pashinyan stressed that Yerevan has not violated any of its obligations towards Russia through its EU accession process and did not want to leave the EEU.

What happened at the meeting? Here’s what we know:

What did Putin tell Pashinyan?

At their meeting on Tuesday, according to the Kremlin, Putin told Pashinyan that while Russia is a key economic and trade partner to Armenia, Yerevan’s EU aspirations could create complications for its EEU membership.

“Armenia’s aspiration to join the EU is the natural and legitimate right of the country and its people. Armenia is a sovereign state, and it is for the Armenian people to determine the trajectory of their own development,” Putin said.

“Nevertheless, this unquestionably creates complications for Armenia’s continued membership in the Eurasian Economic Union, and threatens to erode the advantages the Republic enjoys on the EEU market and to sever established trade links,” he added.

Pashinyan, however, said Armenia’s decision last year to adopt a law launching the process of EU accession did not violate its obligations to Russia or the EEU and that it was only an alternative his government had given to the people of Armenia.

What are Armenia and Russia’s relations like?

After the fall of the Soviet Union in 1991, Armenia became Russia’s closest ally in the South Caucasus, with the two nations developing their trade, economic and political ties. Armenia has also long been Russia’s closest regional ally, a Collective Security Treaty Organisation (CSTO) member, host to a Russian military base and is dependent on Russian gas.

Currently, Russia is Armenia’s key trade and economic partner, accounting for roughly 30 percent of its trade, and an investor in Armenia’s economy. In the first half of this year, bilateral trade also reached $2.5bn.

But despite economic ties, relations between the two countries have been tense since 2023, after the historical conflict in the Nagorno-Karabakh region of Azerbaijan erupted again.

Russia, which is fighting its own war in Ukraine, did not intervene militarily when Azerbaijan launched a major military offensive in Nagorno-Karabakh, which had a large Armenian population and had been de facto independent since the 1990s.

Laurentiu Plesca, a political analyst and researcher focusing on EU enlargement and European security at the German Marshall Fund of the United States, told Al Jazeera that Moscow decision not to support Yerevan during the Karabakh war in 2023 led to Armenia’s pivot towards the West.

He said that this, in turn, upset Moscow, further souring relations.

“Russia started blocking imports of Armenian goods and is threatening to suspend the duty-free supply of gas, oil products, and diamonds to Armenia,” he said.

“The EU, in turn, has pledged economic support to offset that pressure,” he added.

In early July, the European Commission’s President Ursula von der Leyen also told Yerevan that it could count on the EU amid any economic pressure from Russia and pledged an additional 18 million euros (about $20m) as ⁠part of a broader 52 million euros (about $60m) economic support package.

What are Armenia’s EU plans?

Last April, Armenia’s president signed into law a bill that set the legal foundation for the country to move towards joining the EU.

Pashinyan, who took power in 2018 and was part of launching the EU bid, has repeatedly stressed that the bill did not represent an application to join the EU, but the start of a broader process of integration.

However, in July this year, Pashinyan told lawmakers in the country that Armenia would decide its future EU membership by holding a referendum “in the near future”.

Yerevan has significantly deepened its European ties, hosting its first official EU summit last month alongside a wider European gathering attended by Ukrainian President Volodymyr Zelenskyy.

Armenia also hosted French President Emmanuel Macron for a high-profile state visit, which provoked sharp criticism from the Kremlin after a video emerged of Macron singing while Pashinyan played the drums.

What is the EEU?

Putin has previously warned Armenia that it views membership in the EU as incompatible with the EEU, and Armenia would have to leave if it joins the EU.

The EEU is a group of former Soviet Union countries that coordinate economic and trade policies. Its members are Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia. The group’s treaty was established in May 2014, and it began its operations in January 2015.

According to a 2022 Chatham House report, the EEU is in effect a Russian-led effort to create a Eurasian counterpart to the EU.

So why is Armenia’s EU bid a point of tension for Russia and the EEU?

According to the Chatham House report, the EEU serves an important geopolitical purpose for Russia.

“Putin sees it as part of his drive to re-establish the Russian sphere of influence lost by the dissolution of the Soviet Union,” the report’s writers emphasised.

That’s why Armenia seeking closer ties with the EU represents an attempt to break from Russia’s dominance of its neighbourhood, in the eyes of the Kremlin.

In June, Pashinyan rejected a call from Moscow to hold an immediate referendum on leaving the EEU to join the European Union.

Tensions had boiled over at the EEU summit in Kazakhstan on May 29, as Putin and fellow bloc members Belarus, Kazakhstan and Kyrgyzstan issued a joint statement urging Armenia to hold the referendum “as soon as possible”.

Putin also appeared to make a barely veiled threat at the EEU summit, warning Armenia against pursuing its Western ambitions, and referring to Russia’s war in Ukraine, said that the “Ukrainian scenario” had also begun with Kyiv’s EU aspirations.

In a video address broadcast on social media, Pashinyan had responded to Putin and stated that his government would continue working within the EEU until a choice between the two blocs “becomes unavoidable”, noting that any referendum before Armenia formally applies for EU candidate status remains purely theoretical.

“Putting a theoretical choice to a referendum is, of course, neither very sensible nor justified,” Pashinyan had said.

At the SCO summit, however, he reiterated that Yerevan had no plans to leave the EEU and said that Moscow has always supported the development of friendly and mutually beneficial relations with Yerevan.

Plesca, the political analyst, said that at its core, there is a tug-of-war over Armenia’s strategic alignment, playing out on two fronts.

“But the pro-EU stance is already clear, and Moscow wants to reverse it. Having failed to do so at the ballot box in the recent parliamentary elections in June, it is now compensating with economic blackmail,” he said. During Armenia’s parliamentary elections in June, Moscow was accused of seeking to tip the scales by exerting economic and diplomatic pressure on Pashinyan’s government.

He noted that while Armenia does have the legal right to join the EU, doing so while still inside the EEU customs union would be legally ambiguous.

“There’s no mechanism to expel a member, and Armenia hasn’t triggered the six-month exit notice, so an EU bid doesn’t automatically breach” its obligations towards the EEU, Plesca said. “That’s exactly the trap Yerevan is navigating, keeping a foot in both camps for now, while Moscow insists that’s not possible.”

He added that for Russia, Armenia’s EU bid is also more about losing a foothold in the South Caucasus region.